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Just as this article describes a bond as a 30-year bond with 6% coupon rate, this article describes a pass-through MBS as a $3 billion pass-through with 6% pass-through rate, a 6.5% WAC, and 340-month WAM. The pass-through rate is different from the WAC; it is the rate that the investor would receive if he/she held this pass-through MBS, and ...
Pass-through securities: In this type of mortgage-backed security, a trust holds many mortgages and allocates mortgage payments to its various investors depending on what share of the securities ...
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt ...
NAS tranches of bonds are fully protected from prepayments for a specified period, after which time prepayments are allocated to the tranche using a specified step down formula. For example, an NAS bond might be protected from prepayments for five years, and then would receive 10% of the prepayments for the first month, then 20%, and so on.
Residential mortgage-backed security (RMBS) are a type of mortgage-backed security backed by residential real estate mortgages. [1]Bonds securitizing mortgages are usually treated as a separate class, making reference to the general package of financial agreements that typically represents cash yields that are paid to investors and that are supported by cash payments received from homeowners ...
Common underlying assets held may include mortgage-backed securities, commercial real estate bonds and corporate loans. The SPE issues bonds to investors in exchange for cash, which are used to purchase the portfolio of underlying assets. Like other ABS private label securities, the bonds are not uniform but issued in layers called tranches ...
CMBS tend to be more complex and volatile than residential mortgage-backed securities due to the unique nature of the underlying property assets. [ 1 ] The typical structure for the securitization of commercial real estate loans is a real estate mortgage investment conduit (REMIC), a creation of the tax law that allows the trust to be a pass ...
An "asset-backed security" is sometimes used as an umbrella term for a type of security backed by a pool of assets, [1] and sometimes for a particular type of that security – one backed by consumer loans [2] or loans, leases or receivables other than real estate. [3]